Specter asks agency to help victims of Snyder's scam

U.S. Sen. Arlen Specter on Wednesday asked the federal agency that now controls ailing mortgage giants Freddie Mac and Fannie Mae to give some help to the 800 families scammed by ex-broker Wesley A. Snyder, perhaps by changing the terms of their mortgages.

The vast majority of their mortgages are held by Freddie Mac and Fannie Mae, and the banks that sold the mortgages claim they can't modify them because of that, Specter said in a letter to James B. Lockhart III, director of the Federal Housing Finance Agency

"I ask that you take action to ensure that the homeowners who need assistance receive it," Specter said in the letter. "The victims of Mr. Snyder's scheme find themselves in distress through no fault of their own and deserve any assistance that can be provided, including mortgage modifications."

Snyder's Personal Financial Management Inc. sought U.S. Bankruptcy Court liquidation a year ago today, and borrowers discovered they were on the hook for more money at higher rates than the company had promised.

Snyder pleaded guilty to one federal count of mail fraud and is serving a 12-year, two-month sentence in federal prison.

"His conviction will provide little relief to the victims of his scheme, many of who are struggling to make a much larger mortgage payment than Snyder led them to believe they owed," Specter said. "A number of the homeowners face possible foreclosure."

Despite numerous lawsuits against Snyder and his employees, lawyers in the case say there's little money there for restitution.

Other suits are pending against the outside banks as well as a Florida securities firm, under the contention that Snyder acted as their agent but because they failed to supervise him they have responsibility to repay victims' losses.